Question 1

Bonds with a face value of $600,000 and a quoted price of 104¼ have a selling price of

Accepted Answer

A) $625,500. 
B) $624,150. 
C) $602,550. 
D) $624,000. 
A) $625,500. 
B) $624,150. 
C) $602,550. 
D) $624,000.

Question 2

The times interest earned is computed by dividing

Accepted Answer

A) net income by interest expense. 
B) income before income taxes by interest expense. 
C) income before interest expense by interest expense. 
D) income before interest expense and income taxes by interest expense. 
A) net income by interest expense. 
B) income before income taxes by interest expense. 
C) income before interest expense by interest expense. 
D) income before interest expense and income taxes by interest expense.

Question 3

Hulse Corporation retires its $800,000 face value bonds at 105 on January 1, following the payment of annual interest.The carrying value of the bonds at the redemption date is $829,960.The entry to record the redemption will include a

Accepted Answer

A) credit of $29,960 to Loss on Bond Redemption. 
B) debit of $29,960 to Premium on Bonds Payable. 
C) credit of $10,040 to Gain on Bond Redemption. 
D) debit of $40,000 to Premium on Bonds Payable. 
A) credit of $29,960 to Loss on Bond Redemption. 
B) debit of $29,960 to Premium on Bonds Payable. 
C) credit of $10,040 to Gain on Bond Redemption. 
D) debit of $40,000 to Premium on Bonds Payable.

Question 4

Which of the following statements concerning bonds is not a true statement?

Accepted Answer

A) Bonds are generally sold through an investment company. 
B) The bond indenture is prepared after the bonds are printed. 
C) The bond indenture and bond certificate are separate documents. 
D) The trustee keeps records of each bondholder. 
A) Bonds are generally sold through an investment company. 
B) The bond indenture is prepared after the bonds are printed. 
C) The bond indenture and bond certificate are separate documents. 
D) The trustee keeps records of each bondholder.

Question 5

The following partial amortization schedule is available for Courtney Company who sold $750,000, five-year, 10% bonds on January 1, 2020, for $780,000 and uses annual straight-line amortization.   Which of the following amounts should be shown in cell (ii)?

Accepted Answer

A) $81,000 
B) $69,000 
C) $78,000 
D) $60,000 
A) $81,000 
B) $69,000 
C) $78,000 
D) $60,000

Question 6

Thayer Company purchased a building on January 2 by signing a long-term $3,360,000 mortgage with monthly payments of $30,800.The mortgage carries an interest rate of 10 percent.The entry to record the mortgage will include a

Accepted Answer

A) debit to the Cash account for $3,360,000. 
B) credit to the Cash account for $3,360,000. 
C) debit to the Mortgage Payable account for $3,360,000. 
D) credit to the Mortgage Payable account for $3,360,000. 
A) debit to the Cash account for $3,360,000. 
B) credit to the Cash account for $3,360,000. 
C) debit to the Mortgage Payable account for $3,360,000. 
D) credit to the Mortgage Payable account for $3,360,000.

Question 7

The interest charged on a $300,000 note payable, at the rate of 6%, on a 90-day note would be

Accepted Answer

A) $18,000. 
B) $9,000. 
C) $4,500. 
D) $1,500. 
A) $18,000. 
B) $9,000. 
C) $4,500. 
D) $1,500.

Question 8

From the standpoint of the issuing company, a disadvantage of using bonds as a means of long-term financing is that

Accepted Answer

A) bond interest is deductible for tax purposes. 
B) interest must be paid on a periodic basis regardless of earnings. 
C) income to stockholders may increase as a result of trading on the equity. 
D) the bondholders do not have voting rights. 
A) bond interest is deductible for tax purposes. 
B) interest must be paid on a periodic basis regardless of earnings. 
C) income to stockholders may increase as a result of trading on the equity. 
D) the bondholders do not have voting rights.

Question 9

Parker Company issued ten-year, 9%, bonds payable in 2020 at a premium.During 2020, the company's accountant failed to amortize any of the bond premium.The omission of the premium amortization will

Accepted Answer

A) not affect net income for 2020. 
B) cause retained earnings at the end of 2020 to be overstated. 
C) cause net income for 2020 to be overstated. 
D) cause net income for 2020 to be understated. 
A) not affect net income for 2020. 
B) cause retained earnings at the end of 2020 to be overstated. 
C) cause net income for 2020 to be overstated. 
D) cause net income for 2020 to be understated.

Question 10

Sales taxes collected by a retailer are reported as

Accepted Answer

A) contingent liabilities. 
B) revenues. 
C) expenses. 
D) current liabilities. 
A) contingent liabilities. 
B) revenues. 
C) expenses. 
D) current liabilities.

Question 11

A $900,000 bond was retired at 103 when the carrying value of the bond was $933,000.The entry to record the retirement would include a

Accepted Answer

A) gain on bond redemption of $27,000. 
B) loss on bond redemption of $6,000. 
C) loss on bond redemption of $27,000. 
D) gain on bond redemption of $6,000. 
A) gain on bond redemption of $27,000. 
B) loss on bond redemption of $6,000. 
C) loss on bond redemption of $27,000. 
D) gain on bond redemption of $6,000.

Question 12

If $500,000 par value bonds with a carrying value of $476,000 are redeemed at 97, a loss on redemption will be recorded.

Accepted Answer

A) True 
 B)False

Question 13

As interest is recorded on an interest-bearing note, the Interest Expense account is

Accepted Answer

A) increased; the Notes Payable account is increased. 
B) increased; the Notes Payable account is decreased. 
C) increased; the Interest Payable account is increased. 
D) decreased; the Interest Payable account is increased. 
A) increased; the Notes Payable account is increased. 
B) increased; the Notes Payable account is decreased. 
C) increased; the Interest Payable account is increased. 
D) decreased; the Interest Payable account is increased.

Question 14

If bonds sell at a premium, the interest expense recognized each year will be greater than the bond interest paid.

Accepted Answer

A) True 
 B)False

Question 15

The 2020 financial statements of Harper Co.contain the following selected data (in millions).   The debt to assets ratio is

Accepted Answer

A) 45.0%. 
B) 50.0%. 
C) 2.22%. 
D) 6.2 times. 
A) 45.0%. 
B) 50.0%. 
C) 2.22%. 
D) 6.2 times.

Question 16

The journal entry to record the issuance of bonds at a discount will include a

Accepted Answer

A) debit to Cash for the face amount of the bonds. 
B) debit to Cash for the face amount of the bonds plus the amount of the discount. 
C) debit to Cash for the face amount of the bonds minus the amount of the discount. 
D) credit to Cash for the face amount of the bonds. 
A) debit to Cash for the face amount of the bonds. 
B) debit to Cash for the face amount of the bonds plus the amount of the discount. 
C) debit to Cash for the face amount of the bonds minus the amount of the discount. 
D) credit to Cash for the face amount of the bonds.

Question 17

The interest expense recorded on an interest payment date is increased

Accepted Answer

A) by the amortization of premium on bonds payable. 
B) by the amortization of discount on bonds payable. 
C) only if the bonds were sold at face value. 
D) only if the market rate of interest is less than the stated rate of interest on that date. 
A) by the amortization of premium on bonds payable. 
B) by the amortization of discount on bonds payable. 
C) only if the bonds were sold at face value. 
D) only if the market rate of interest is less than the stated rate of interest on that date.

Question 18

Don's Pharmacy has collected $900 in sales taxes during March.If sales taxes must be remitted to the state government monthly, what entry will Don's Pharmacy make to show the March remittance?

Accepted Answer

The answer of Don's Pharmacy has collected $900 in sales...

Question 19

Thayer Company purchased a building on January 2 by signing a long-term $3,360,000 mortgage with monthly payments of $30,800.The mortgage carries an interest rate of 10 percent.The amount owed on the mortgage after the first payment will be

Accepted Answer

A) $3,360,000. 
B) $3,357,200. 
C) $3,332,000. 
D) $3,329,200. 
A) $3,360,000. 
B) $3,357,200. 
C) $3,332,000. 
D) $3,329,200.

Question 20

If bonds are issued at a premium, the stated interest rate is

Accepted Answer

A) higher than the market rate of interest. 
B) lower than the market rate of interest. 
C) too low to attract investors. 
D) adjusted to a higher rate of interest. 
A) higher than the market rate of interest. 
B) lower than the market rate of interest. 
C) too low to attract investors. 
D) adjusted to a higher rate of interest.

Bonds with a face value of $600,000 and a quoted price of 104¼ have a selling price of

The times interest earned is computed by dividing

Hulse Corporation retires its $800,000 face value bonds at 105 on January 1, following the payment of annual interest.The carrying value of the bonds at the redemption date is $829,960.The entry to record the redemption will include a

Which of the following statements concerning bonds is not a true statement?

The following partial amortization schedule is available for Courtney Company who sold $750,000, five-year, 10% bonds on January 1, 2020, for $780,000 and uses annual straight-line amortization. Which of the following amounts should be shown in cell (ii)?

Thayer Company purchased a building on January 2 by signing a long-term $3,360,000 mortgage with monthly payments of $30,800.The mortgage carries an interest rate of 10 percent.The entry to record the mortgage will include a

The interest charged on a $300,000 note payable, at the rate of 6%, on a 90-day note would be

From the standpoint of the issuing company, a disadvantage of using bonds as a means of long-term financing is that

Parker Company issued ten-year, 9%, bonds payable in 2020 at a premium.During 2020, the company's accountant failed to amortize any of the bond premium.The omission of the premium amortization will

Sales taxes collected by a retailer are reported as

A $900,000 bond was retired at 103 when the carrying value of the bond was $933,000.The entry to record the retirement would include a

If $500,000 par value bonds with a carrying value of $476,000 are redeemed at 97, a loss on redemption will be recorded.

As interest is recorded on an interest-bearing note, the Interest Expense account is

If bonds sell at a premium, the interest expense recognized each year will be greater than the bond interest paid.

The 2020 financial statements of Harper Co.contain the following selected data (in millions). The debt to assets ratio is

The journal entry to record the issuance of bonds at a discount will include a

The interest expense recorded on an interest payment date is increased

Don's Pharmacy has collected $900 in sales taxes during March.If sales taxes must be remitted to the state government monthly, what entry will Don's Pharmacy make to show the March remittance?

Thayer Company purchased a building on January 2 by signing a long-term $3,360,000 mortgage with monthly payments of $30,800.The mortgage carries an interest rate of 10 percent.The amount owed on the mortgage after the first payment will be

If bonds are issued at a premium, the stated interest rate is

Introduction to Financial Statements

A Further Look at Financial Statements

The Accounting Information System

Accrual Accounting Concepts

Merchandising Operations and the Multiple-Step Income Statement

Reporting and Analyzing Inventory

Fraud, Internal Control, and Cash

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Stockholders Equity

Statement of Cash Flows

Financial Analysis: The Big Picture

Understanding Investments in Debt and Equity Securities

Filters

Exam 10: Reporting and Analyzing Liabilities

Bonds with a face value of $600,000 and a quoted price of 104¼ have a selling price of

The times interest earned is computed by dividing

Hulse Corporation retires its $800,000 face value bonds at 105 on January 1, following the payment of annual interest.The carrying value of the bonds at the redemption date is $829,960.The entry to record the redemption will include a

Which of the following statements concerning bonds is not a true statement?

The following partial amortization schedule is available for Courtney Company who sold $750,000, five-year, 10% bonds on January 1, 2020, for $780,000 and uses annual straight-line amortization. Which of the following amounts should be shown in cell (ii)?

Thayer Company purchased a building on January 2 by signing a long-term $3,360,000 mortgage with monthly payments of $30,800.The mortgage carries an interest rate of 10 percent.The entry to record the mortgage will include a

The interest charged on a $300,000 note payable, at the rate of 6%, on a 90-day note would be

From the standpoint of the issuing company, a disadvantage of using bonds as a means of long-term financing is that

Parker Company issued ten-year, 9%, bonds payable in 2020 at a premium.During 2020, the company's accountant failed to amortize any of the bond premium.The omission of the premium amortization will

Sales taxes collected by a retailer are reported as

A $900,000 bond was retired at 103 when the carrying value of the bond was $933,000.The entry to record the retirement would include a

If $500,000 par value bonds with a carrying value of $476,000 are redeemed at 97, a loss on redemption will be recorded.

As interest is recorded on an interest-bearing note, the Interest Expense account is

If bonds sell at a premium, the interest expense recognized each year will be greater than the bond interest paid.

The 2020 financial statements of Harper Co.contain the following selected data (in millions). The debt to assets ratio is

The journal entry to record the issuance of bonds at a discount will include a

The interest expense recorded on an interest payment date is increased

Don's Pharmacy has collected $900 in sales taxes during March.If sales taxes must be remitted to the state government monthly, what entry will Don's Pharmacy make to show the March remittance?

Thayer Company purchased a building on January 2 by signing a long-term $3,360,000 mortgage with monthly payments of $30,800.The mortgage carries an interest rate of 10 percent.The amount owed on the mortgage after the first payment will be

If bonds are issued at a premium, the stated interest rate is

Introduction to Financial Statements

A Further Look at Financial Statements

The Accounting Information System

Accrual Accounting Concepts

Merchandising Operations and the Multiple-Step Income Statement

Reporting and Analyzing Inventory

Fraud, Internal Control, and Cash

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Stockholders Equity

Statement of Cash Flows

Financial Analysis: The Big Picture

Understanding Investments in Debt and Equity Securities

Filters